Modeling PortCo Add Ons
I recently started my PE gig (moved from credit), and was tasked with a portco add-on that will be fully funded using the portfolio company's revolver. I may be overthinking this one, but how would one correctly model this out at the portco level? For some reason have never modeled out this sort of deal before. Most companies just draw the revolver and call it a day for these kind from my experience. Currently have a 3 statement transaction model for the add-on business, but not sure how to model out for the portco. Would appreciate any tips or pointers on this, thanks
Assume there’s already a portco model you just need to update?
The way we do it at my fund is update the operating model to include the add-on (update growth / include acquired revenue, build in any synergies, etc) and then update debt profile for draw (and would do the same if funded with equity).
If you already have an LBO driving off the company model it should really just be updating the operating build and capital structure and seeing what it spits out
Thanks. What would the PF adjustments be on the balance sheet at time of the add on deal? Assuming you're forecasting to a typical 5 year period going forward.
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